Defendants Play Offense in KPMG Case

The New York Times reports that defendants in the KPMG tax-shelter case filed over two-dozen motions in Manhattan federal court yesterday, requesting that charges be dropped because the shelters have never been deemed illegal.

Defense lawyers launched a frontal assault yesterday, jointly filing many of the motions and describing the case as riddled with problems. Carolyn Rule of Kostelanetz & Fink in New York, the lawyer for former KPMG vice chairman Richard Smith, said “the whole indictment is sloppy and peppered with words that have no legal meaning.”

Stanley Arkin of New York’s Arkin Kaplan, counsel to ex-KPMG partner Jeffrey Eischeid, filed a memo with the court which sought to place blame on the firm rather than on his client: “Each of the strategies were repeatedly approved by KPMG after an exhaustive vetting process, and the company’s approval of the strategies was communicated widely within KPMG.”

The legal community has focused intensely on this case, and not just because of the legal work it’s generating for the white-collar bar. Raymond Ruble, a former tax lawyer at Sidley Austin, was one of the nineteen people indicted in the case.

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